Microsoft to acquire LinkedIn for $26.2 billion; LNKD stock surges 47%

On Monday, it was announced that a $26.2 billion deal had been struck to acquire the professional social platform for $196 per share.

After the announcement of the all-cash deal, LinkedIn's shares surged 47 percent to near $193, while Microsoft's stock was down 3.2 percent. Trading in Microsoft had been halted briefly for news pending before the announcement.

Microsoft's "AAA" rating from Moody's Investors Service is under review for a potential downgrade, while Standard & Poor's reaffirmed its "AAA" rating and stated that it maintains all other ratings and a "stable outlook" on the company.

Jeff Weiner will remain as CEO of LinkedIn and will report to Microsoft CEO Satya Nadella. The acquisition has been unanimously approved by both companies' boards and is expected to close by the end of the year. However, it is still subject to approval from LinkedIn shareholders and regulators.

Nadella stated that the LinkedIn team has built a successful business around connecting professionals globally. By working together, we can speed up the growth of LinkedIn, Microsoft Office 365, and Dynamics while empowering individuals and organizations worldwide.

Weiner stated that "not much will change" and employees will retain their titles and managers.

The exception is for team members whose jobs solely focus on maintaining LinkedIn's public status. For everything else, it's business as usual. Our mission, vision, culture, and values remain the same, and I am still the CEO of LinkedIn.

Ivan Feinseth, CIO at Tigress Financial Partners, stated on CNBC's "Squawk Box" that his company releases research on Microsoft.

Feinseth stated that LinkedIn is the ideal platform for business social interaction, with users ranging from entry-level interns to top CEOs. Microsoft can leverage this platform to expand its presence in social media, according to him.

Microsoft has the resources, cash, balance sheet, and borrowing ability to acquire a lot more.

GAM's investment director, Mark Hawtin, stated on CNBC's "Closing Bell" that he believed both companies gained from the deal.

Microsoft can now offer this social fabric, which is crucial in the network economy, according to Hawtin, who owns shares in both companies through his firm's funds. For LinkedIn, this also provides an opportunity to accelerate its business growth.

In the past year, LinkedIn's stock reached a high of $258.39. Despite this, the stock has decreased by more than 14% year to date and 10% in the past year. LinkedIn, with over 400 million members, acquired Lynda.com in April last year. The company also released a new version of its Recruiter product this year, which resulted in increased membership, engagement, and financial results.

On Monday, Microsoft's stock price was around $50, a decrease from its 52-week high of $56.85. Despite this, the company's stock has experienced an increase of over 8 percent in value yearly.

Microsoft is acquiring LinkedIn for $26.2 billion. This amount was incorrectly reported in one headline in a previous version of this article.